Iceland's Benediktsson to make new attempt to form government

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REYKJAVIK (Reuters) - The Independence Party leader Bjarni Benediktsson said on Friday he had been asked to try to form a new Icelandic government, after three failed attempts since the Oct. 29 election.

Benediktsson, with a mandate from President Gudni Johannesson, will try to reach agreement on a centre-right coalition with Bright Future and the Reform Party.

“We all know that this is the smallest possible majority you can have in Althingi (parliament) and so it is important to go thoroughly through the matters upfront and that is why this has taken time,” Benediktsson said.

He said he was sure the parties would have finalised discussions before Jan. 24 when parliament reconvenes

Earlier this month, Iceland’s anti-establishment Pirate Party became the third party to fail to form a government after trying to build a centre-left coalition with the Left Greens and three other parties.

The impasse has raised the possibility of another election.

One of the major tasks for a new government will be to continue lifting capital controls that were put in place after the 2008 financial crisis. Parties on both sides have pledged no major changes to the removal process.

Reporting by Ragnhildur Sigurdardottir in Reykjavik and Bjorn Rundstrom in Stockholm; Editing by Janet Lawrence